Solar Industry Consolidation Watch: SunPower, Canadian Solar

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Last week saw Canadian Solar's (Nasdaq:CSIQ) stock pop by more than 20 percent behind rumors that it would be acquired by China National Offshore Oil Company (CNOOC), according to reports in China Business Journal on April 14. Canadian denied reports in the Chinese news media, according to Reuters, and that promptly saw its stock settle back to its $150 million market cap.

SunPower (Nasdaq:SPWR) announced that as part of a cost reduction initiative, it will "re-purpose" its Fab 1 operations in the Philippines, according to a press release, and look for tenants for that site. Manufacturing will be consolidated in Fabs 2 and 3 with the intent of of incorporating a new process that reduces the number of manufacturing steps.

SunPower "expects to achieve its cost goal of approximately $0.86 per watt, on an efficiency-adjusted basis, exiting 2012." Baird Investment Banking said, "The decision is prudent given the continuing oversupply situation facing the industry. While SPWR's leading conversion efficiencies garner a pricing premium for its products, given the significant fall in prices over the past year, cost reductions remain a major area of focus."